Canadian companies may want to evaluate their stock option granting practices and consider the following steps:
- Adopt blackout periods to preclude option grants when executives have material information not yet released publicly.
- Adopt a fixed schedule of option grant dates, but refrain from making grants on those dates when executives have market-moving news.
- Keep detailed minutes of compensation committee and board meetings during which options are granted or discussed.
- Refrain from making option grants for a retroactive date.
- Assess the federal investigation risk by reviewing past grants to determine if the grant date matches the grant approval date and whether options were granted when stock prices were depressed.
- Prepare to meet new U.S. Securities and Exchange Commission disclosure requirements by gathering information on the timing and exercise price of 2006 executive option grants
Source: Osler, Hoskin & Harcourt L.L.P.
